No trader placed any order to ‘buy’ or ‘sell’ at NepalStock Exchange (Nepse) today though the brokerage firms had kept their officesopen. Nevertheless, the country’s only trading bourse and CDS Clearing Ltd hadremained open for business throughout the normal trading hours today, that is,from 11:00 am to 3:00 pm.

Ambika Prasad Poudel, chairman of Nepal Investors Forum,said that trading was halted automatically at the behest of the investorsagainst the government’s move to fix Rs 100 as the base price of per unit bonusand rights shares and enforce 7.5 per cent tax on the difference of actualprice of the shares traded and the base price.

“Our protest will continue till the government withdrawsits circular of taxing share traders irrespective of whether he or she has madea profit or not,” Poudel said.

As the talks with the joint secretary of the EconomicPolicy Analysis Division of the Ministry of Finance ended inconclusively onMonday, investors had decided to intensify their agitation by halting sharetrading from today.

Though the revenue secretary was expected to meet shareinvestors today, there was no such call after the investors launched theirprotest programme.

Earlier, the government used to enforce five per cent CGTon the trade of bonus and rights share in the secondary market. Along with theincrease in the CGT to 7.5 per cent through the federal budget 2018-19 on May29, the tax administration had also changed the CGT calculation method.

Earlier, the CGT used to be enforced on the income madefrom the difference in actual price of share traded and adjusted base price ofstocks. Adjusted base price of the stock means the price of stock immediatelybefore book closure plus the value of share received from rights and bonusdivided by the number of shares.

“We have no issues on the government’s decision to increaseCGT rate, but we have strong reservations against the change in the calculationmethod,” said Poudel.

He argued that along with the increase in supply of shares,stock prices have been falling rampantly and investors have been incurringlosses in recent months. “In this context, the government should understand thescenario of market and withdraw this rule,” he added.

Earlier, traders had to pay tax only on the profit earnedfrom trading of bonus and rights shares. But the new provision compels sharetraders to file CGT whether or not they earn profit from selling their shares,as the base rate of per unit bonus and rights share is fixed at Rs 100,according to investors.

Meanwhile, the government has formed a study committee tolook into the grievances raised by the share investors. According to RevenueSecretary Shishir Kumar Dhungana, the committee tasked with policyrecommendation comprises of Joint Secretary at Economic Policy AnalysisDivision Uttar Kumar Khatri, Joint Secretary at Revenue Division Ram SharanPudasaini, Director General of IRD Bishnu Prasad Nepal and representatives fromSecurities Board of Nepal, Nepse and CDS Clearing Ltd. The committee has beenasked to hold consultations with investors as well while preparing the report.

“The government will make a decision based on therecommendation of the report that is to be submitted after two weeks,” saidDhungana, adding that the IRD circular will not be withdrawn till the report issubmitted.